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Eagles and Dollars: A Case of Monetary Apostasy

Eagles and Dollars: A Case of Monetary Apostasy

Steven Montgomery

Thursday, April 22, 2004

PREAMBLE

All the perplexities, confusion, and distress in America
arise, not from defects in the Constitution or confederation, not from
want of honor or virtue, so much as downright ignorance of the nature
of coin, credit, and circulation.(*)

One of the most misunderstood and misapplied powers granted to
Congress is that power contained in these four words from Article 1
Section 8 of the United States Constitution:

Regulate the value thereof

What is this power? How is it misunderstood? How is it misapplied?
What equally misunderstood and misapplied power is the power to
"regulate the value thereof" related? A correct understanding is
critical to understanding how this power is to be applied, how it is
misapplied or misinterpreted, and how you, the reader can use this
understanding to work for efforts to see that this power is properly
applied.

Furthermore, It is vital to understand:

Money, to the founders, was Gold and Silver Coin

The power to issue "Bills of Credit" or redeemable paper money, was prohibited to both the Federal and State Governments

The power to issue irredeemable paper money, or money by mere fiat, was a power never even contemplated by the founders

Congress could make Gold and Silver coins but had no power
whatsoever to create paper money. So what then, is meant by the four
words, "regulate the value thereof?" Steven Montgomery gives an answer
to these perplexing questions in the following article.

Footnote

* John Adams, 1787 in a letter to Thomas Jefferson.

ARTICLE

Eagles and Dollars: A Case of Monetary Apostasy

by Steven Montgomery

It may seem odd to Americans living in the twenty-first century
that in the United States Constitution, a foreign coin is referred to
as the Money-unit of our Nation, but that is exactly what the
Constitution established. The term "Dollar" is referred to twice in the
Constitution(1),
but, in 1787-1789, the only "Dollar" in existence was the Spanish
milled dollar. The word "Dollar" is not defined in the Constitution but
no definition was necessary: Everyone familiar with economic affairs
knew that the word meant the "silver Spanish milled dollar."(2)

Beginning as early as 1704 the "piezo de ocho" or piece of eight, as
the silver Spanish milled dollar was known, became, for all practical
purposes, the money-unit of the American people. In 1704, Queen Anne
issued a proclamation binding upon the American Colonies that declared
that all foreign silver coins were to be "regulated, according to their
weight and fineness" and compared to the standard of "the pieces of
eight."(3)
Similarly in 1776, a committee of the Continental Congress declared
that the Spanish milled dollar had become by default "the Money-Unit or
common measure"(4)
in use throughout the Colonies. In 1784 Congress used the "Spanish
piece of eight reals, or, as the Americans called it, the dollar, as
the unit of currency(5)
". Further, in 1785, Congress proposed the Spanish milled dollar as
"the money unit" arguing that the "Dollar . . . has long been in
general use" and "accords with the natural modes of keeping accounts(6)
" and in 1786, Congress established the Spanish Dollar as the "money unit for computation. . . without a negative vote(7)
". Finally, after the adoption of the Constitution, Congress in 1792,
under their authority to "coin Money", legislated that any new
"Dollars" coined were to be "of the value of a Spanish milled dollar"(8)
but allowed the Spanish milled dollar to continue to circulate and to
be accepted (when of full weight and not worn or clipped) "in the
public offices" and "proceedings in the courts" (as well as the new
"Dollars") as the "Money of Account of the United States".(9)

This early use of a foreign coin as our "Money of Account" is
not the only strange aspect--to us modern Americans--of our monetary
system: Consider the peculiar power of Congress to regulate the value
of "foreign coin"(10)
or the power to punish counterfeiters of not only United States coins
but foreign coins (such as the Spanish Piece of Eight) which were made
"current" in the United States?(11) Exactly what did our founders mean by these provisions?

Altogether There are six major provisions in the Constitution (including the Bill of Rights)(12)
that deal with or refer to money. Each of these provisions must be
considered and related to each other to thoroughly and properly
understand the Founders intentions. However, this article will hone in
on one tiny, but extremely important, narrow aspect of these monetary
powers and disabilities--an attempt to show--what the Founders meant by
the power to "regulate value" and how this power was considered
inseparable and related to the power to fix a "Standard". Furthermore,
that Congress--as a whole--understood and followed the founders
intentions concerning these powers as manifest in the debates in
congress and every coinage act up to 1857. Furthermore, that the early
U.S. Supreme Court was true and faithful to the founders intentions, as
manifest by the majority decisions of the Court, up to 1870.

The power that Congress has to "regulate value" and fix a "standard"
have an extensive English common-law history. As mentioned earlier, the
Spanish milled dollar had become, by Queen Anne's Proclamation of 1704
at least, the "common measure", or standard by which all other coins
(both gold and silver) were to be measured in the colonies. In other
words samplings could be taken of various foreign (or domestic) silver
coins and assayed to determine the fine silver content and then
compared against the amount of fine silver contained in the
Standard--the Dollar. Thus, technically speaking, the American colonies
were on a silver standard.(13)
Gold coins could be likewise assayed for fine gold content and then the
free market ratio between gold and silver, used to determine its value.
Any coin, whether Gold or Silver, was to compared with the standard and
valued proportionately. In other words, foreign coins could be declared
"legitimate foreign coin," by declaring "at what value it shall be
taken in payments," which was accomplished by "comparison with the
standard,"(14) which was fixed by the king and was to be of a "given weight. . . of a given fineness" which would then be a "true standard".(15)

Thus we see that the Common law of England, as applied in the
Colonies, understood the power to "regulate value" as part and parcel
of the power to fix a "standard".(16)
These twin powers were to be used in conjuction with each other. You
cannot properly "regulate value" without a properly fixed standard.
Likewise, you cannot properly provide an adequate monetary system
without fixing a standard. These two powers are inseparable from each
other, yet they are entirely different and distinct powers.

After the Colonies declared independence and split with
England, the Coinage policy of the Continental Congress paralleled this
traditional common-law approach. A committee of the Continental
Congress in 1776 prepared a table of values of various silver and gold
coins relative to the Spanish milled dollar which were "estimated. . .
according to the quantity of fine silver they contain[ed]" in the case
of silver coins and in the case of gold coins "the value of fine gold
they contain[ed] and the proportion. . . which fine gold bears to that
of fine silver in the marketplace".(18)
In 1786, a congressional Board of treasury stated that it was the
intention of Congress to adopt as the "Money-Unit" the "common dollars
(or Spanish milled dollars)" and further determined that any new Units
or Dollars coined were to contain "three hundred and seventy five
grains and sixty four hundredths of a Grain of fine silver"
(effectively setting a standard).(19)
The Board also stated that "the difference that Custom has established
between coined gold and silver, in the United States," or in other
words the free market ratio between gold and silver, should be a basis
for establishing the relative value of such gold and silver coins.

Under the newly formed Constitution of the United States, Congress
in 1792, established a mint and authorized the minting of both silver
and gold coins. The "Standard" was established by making the "Dollar"
the "money of Account of the United States" which all public offices
and courts were bound to accept, and defining that "Dollar" as 371.25
grains of pure silver(20) which was the average weight then of the Spanish Piece of Eight.(21)
Gold coins in the form of "Eagles", "Half Eagles", and "Quarter Eagles" were also authorized.(22)
The ratio between gold and silver (as then deemed accurate by the free market) was established as 15:1.(23)
The Eagle was to be "of the value of ten dollars or units" so its
weight was defined as 270.5 grains of pure gold (each "dollars" worth
of value being 24.75 grains of gold or 1/15 of 371.25 thus keeping in
line with the ratio of 15:1). Lesser Gold and Silver coins were also
authorized and their respective "weights" and "values" were also
determined by the standard--371.25 grains of silver. Thus Congress
"fixed" the standard of value as 371.25 grains of pure silver, called
this weight of silver a "Dollar", and "regulated" the value of other
gold and silver coins (both the newly minted coins whether gold or
silver and the Spanish milled Dollar) according to this standard. It is
important to note that gold coins, taking the Eagle as an example, was
not denominated in terms of "dollars" but was simply called an "Eagle"
which had an intrinsic free market worth "of the value of ten dollars".(24)

Thus in the Colonies and later under the Government of the United
States Constitution, a fixed weight of silver was recognized as the
standard by which to measure all other coins both gold and silver. Adam
Smith notes how the general public largely understood the concepts of
"fixing" a standard and "regulating" the value of coinage:

. . . as people become gradually more familiar with the use
of different metals in coin, and consequently better acquainted with
the proportion between their respective values, it has in most
countries. . . been found convenient to ascertain this proportion, and
to declare by a public law, that a guinea (of gold), for example, of
such a weight and fineness, should exchange for one and twenty
shillings (of silver) or be a legal tender for a debt of that amount.
In this state of things, and during the continuation of any one
regulated proportion of this kind, the distinction between the metal
which is the standard, and that which is not the standard, becomes
little more than a nominal distinction.(25)

Vieira notes how the founders used precise linguistic wording in their
use of the phrases "fix the standard" and "regulate. . . value" and
subtly diverge in meaning:

The phrase "fix the standard" empowers Congress to
define the basic units of "Weights and Measures"; whereas, the phrase
"regulate the Value" empowers Congress only to apply the basic unit of
"Value", which the constitution elsewhere explicitly identifies as the
"dollar", a known, historically fixed weight of silver. Moreover,
whereas the verb "fix" as applied to "Weights and Measures" implies
"stability and confirmation", the verb "regulate" as applied to coinage
implies continuous adjustment. . . the Framers. . . in one phrase
selecting the verb that connotes the establishment of permanent
"Standards", without which a system of "Weights and Measures" cold not
serve its purpose; and, in the other, choosing the synonym that
connotes a process of inter-comparisons among changing forms of
coinage, according to a set "Money-Unit", without which a monetary
system involving both gold and silver could not achieve its end.(26)

The U.S. Congress remained faithful to this particular monetary
understanding until 1857. For instance, in the coinage act of 1793,
Congress recognized the need to make "current" various foreign coins
(in other words to make these coins more popular in everyday use) by
enacting a statute regulating their value and declaring that these
"foreign gold and silver coins shall pass current as money within the
United States. . . at [specified] rates". At the same time however,
Congress anticipated an adequate supply of United States coin by
providing that "all foreign coins except Spanish milled dollars shall
cease to be a legal tender" (Congress thus once again endorsing the
Spanish milled dollar as the basic unit of the country).(27)

By 1834 two major problems had surfaced: First, the free market
valued gold at a rate closer to a 16:1 ration than the 15:1 ratio
determined by the Coinage Act of 1792; Second, Banks proliferated--and
began an over-issuance of paper currency. Because the free market value
of gold was higher than the ratio established by Congress, due to the
actions of Greshams law(28),
gold began to disappear from currency. The Coinage Act of 1834
addressed these two interrelated problems: First, by fixing the ratio
between gold and silver at 16:1, and consequently because of this ratio
change, authorized the Coining of new Eagles, Half Eagles, and Quarter
Eagles of reduced weights(29)
, each to be of the value of ten dollars, five dollars and two Dollars
and fifty cents respectively; Second, by changing to a higher ratio
between silver and gold an attempt was made to "strike a fatal blow at
the ability of banks to sustain a circulation of small-denomination
currencies."(30)

In relation to the Act of 1834(31)
, First, the Select Committee on Coins again stressed that the thing to
be desired "in the monetary system is a standard of uniform value" and
that this standard should be silver "the ancient currency of the United
States, the metal in which the money unit is exhibited"(32)
. Second, Congress set the "Value" of the (gold) Eagle by referring to
the (silver) dollar, at the newly accepted market exchange ratio, just
as it had done in 1792. Third, Congress declared that gold coins minted
before the effective date of the act should be valued thereafter at
their intrinsic values according to the revised exchange ratio.
Finally, just as in 1792, Congress made the new "gold coins . . .
receivable in all payments, when of full weight, according to their
respective values; and when of less than of full weight, at less
values, proportioned to their respective actual weights" showing once
again its understanding that "To . . . regulate the Value" of a coin
means to state its intrinsic value (in weight of precious metal) as
against the standard, and to make it "current" or legal tender for that
"Value" only. (33)

In 1837 Congress enacted a "supplement" to the Coinage Act of 1792.
This act retained the amounts of pure silver and pure gold in the
various silver and gold coins but merely adjusted the alloy content of
both silver and gold coins. In the case of the "Dollar," the amount of
pure silver remained at 371.25 grains, and for the "Eagle," came as
close as possible or within 0.086% of its weight as constitutionally
regulated in 1834.(34)
Thus the Coinage act continued the principles first laid down in 1792.

The Coinage act of 1849 authorized the coinage of a small gold coin
"each to be of the value of one dollar or unit" which was one-tenth the
weight of an Eagle as defined by the Coinage Act of 1837. Congress was
careful however, to refer to this new gold coin not "as a dollar, or
the dollar, but as 'being of the value of one dollar" thus referring to
this coin in terms of "regulating its Value as against the original
(silver) standard [371.25 grains of silver], not in terms of defining a
new, or competing standard."(35)

When Congress reset the ratio between gold and silver at 16:1 in
1834 everyone expected gold to continue to appreciate in value against
silver. Instead, due to the discovery of huge gold deposits in
California and Australia, the opposite situation occurred. The Free
Market first began to value gold at around a 15.7:1 ratio at which
point, again due to Greshams Law, Silver Coins ceased to circulate
(just as the gold coins had stopped circulating when gold was valued
higher in the free market than at the legal ratio). When the ratio
diminished to a 15.5:1 ratio, it became possible to melt and export
silver coins at a profit. Congress failed to readjust a proper free
market ratio between gold and silver at this time but did act To remedy
an inadequate supply of silver coinage, by reducing the weight of the
half dollar so that the amount of pure silver in two half dollars only
amounted to 93.1% of the amount in the Constitutional Dollar.(36)
Congress however, limited the legal tender ability of these coins to
payment of debts. . . not exceeding five dollars. Although these coins
met the old common law standard of "not [being] upon the same footing
with the other [Constitutional Coins]"(37)
the wisdom of Congress in not properly regulating a proper ratio between silver and gold is suspect.

By 1857, Congress apparently thinking that the United States had
enough of their own coinage, repealed "all former acts authorizing the
currency of foreign gold or silver coins, and declaring the same a
legal tender in payment of debts".(38)
So, for the first time since Queen Anne's Proclamation of 1704, the
actual Spanish dollar ceased to be the "money of account" in the United
States, being replaced by the United States Silver Dollar first
authorized in 1792.

From 1792 through 1857, Congress consistently interpreted Art. I,
Sec. 8, Cl. 5, or the powers to "Coin Money," "regulate the value," and
"fix a standard," the way that English common law and
pre-constitutional history support. For over sixty years from
ratification of the Constitution till just before the Civil War did
Congress ever:

Coin any metal as "Money" other than gold, silver or copper

Change or vary from the constitutional standard of value--the dollar--as defined as 371.25 grains of pure silver

Regulate
the value of any foreign or domestic coin (except for small
denomination subsidiary coins, used primarily to provide "change") at
other than what Congress determined in good faith was its intrinsic
value in relation to the dollar

Declare any coin (with the exception of small denomination subsidiary coins) a legal tender for more than its intrinsic value

Claim that it had any power whatsoever to do otherwise in any of these particulars

The early Supreme Court decisions remained true to the common law
and U.S. Constitutional monetary tradition. The Court making such
remarks as that is was regarded as an "important trust" to maintain the
standard of value and that Congress had an "obligation to fulfill that
trust (39)
.

Regarding the concept of fixed standards, the Supreme Court, In 1857, wrote that:

The policy of the Constitution was to provide a fixed
and uniform standard of value throughout the United States, by which
the commercial and other dealings between the citizens thereof, or
between them and foreigners, as well as the moneyed transactions of the
government should be regulated...and why establish a standard at all,
for the government of the various contracts which might be entered
into, if the contracts might afterwards be discharged by a different
standard? (40)

And that Congress has the:

trust and duty of creating and maintaining a uniform
and pure metallic standard of value throughout the United States. The
power of Coining Money and of regulating its value were delegated to
Congress by the Constitution for the very purpose, as assigned by the
framers of that instrument, of creating and preserving the uniformity
and purity of such a standard of value...Whatever functions Congress
are, by the Constitution authorized to perform, they are, when the
people's good requires it, bound to perform, and on this principle,
having emitted a circulating medium, a standard of value indispensable
for the purposes of the community, and for the action of the government
itself, they are accordingly authorized and bound in duty to prevent
its debasement and expulsion." (41)

And that:

[The] power of regulation is a power to determine the
weight, purity, form, impression, and denomination of the several coins
and their relation to each other, and the relations of foreign coins to
the monetary unit [or standard] of the United States."

Paul Bakewell, in his book, "Thirteen Curious Errors about Money,"
wrote in summarizing these early statements of the Supreme Court that:

A standard of value is indispensable for the purposes of the Nation and for the action of the government itself

The
trust and duty of maintaining and preserving the uniformity and purity
of the metallic standard of value is an obligation of the government
imposed by the Constitution

Having emitted a Standard of Value, Congress is bound in duty to prevent its debasement

Fast forwarding to the present day, and it becomes clear that we, as
modern Americans have largely forgotten and forsaken our monetary roots
and our common law heritage. Well might it be said of us that "Thy
silver is become dross, thy wine mixed with water". (42)
Of course Isaiah here is talking about Israel's collective apostasy but
it is interesting that Isaiah would talk about it in terms of their
monetary system. As is the case with much of Isaiah--there is a
multiple meaning at work here and he just might have meant their
monetary apostasy as well. Perhaps modern America would do well to
repent from this apostasy so that the Lord can "purge away [our paper
money] dross, and take away [our monetized debt] tin".(43)

2. Edwin Vieira Jr., Pieces of Eight: The Monetary
Powers and Disabilities of the United States Constitution: A Study in
Constitutional Law, p. 62.

3. An Act for ascertaining the Rates of foreign coins in her majesty's Plantations in America, 1707, 6 Anne, ch 30, Section I.

4. "all silver coins...to be estimated...according
to the quantity of silver they contain" and "gold coins...according to
the quantity of fine gold they contain and the proportion...which the
value of fine gold bears to that of fine silver" in the free market.
(Vieira, Op Cite, pg. 16.)

* Article 1, § 8, clause 2. The Congress shall have Power . . . to borrow Money on the credit of the United States.
* Article 1, § 8, clause 5. The Congress shall have Power . . . To
coin Money, regulate the Value thereof, and of foreign Coin, and fix
the Standard of Weights and Measures.
* Article 1, § 8, clause 6. The Congress shall have Power . . . To
provide for the Punishment of counterfeiting the Securities and current
Coin of the United States.
* Article 1, § 9, clause 1. The Migration or Importation of such
Persons as any of the States now existing shall think proper to admit,
shall not be prohibited by the Congress prior to the Year one thousand
eight hundred and eight, but a Tax or duty may be imposed on such
Importation, not exceeding ten dollars for each Person.
* Article 1, § 10, clause 1. No State shall . . . coin Money; emit
Bills of Credit; make any Thing but gold and silver Coin a Tender in
Payment of Debts . . .
* Amendment VII. In suits at common law, where the value in
controversy shall exceed twenty dollars, the right of trial by jury
shall be preserved.

The current popular concern with a "gold standard", and
the long-standing notion that the United States operated on such a
standard until the 1930's prompt one further clarification of the
nature of the Constitution's monetary system. Technically, adoption of
the (silver) dollar as the national money of account places the country
on the "silver standard", in the sense that the constitutional unit
consists of that metal. In practice, however, both silver and gold are
equally "standards" of the system, because "regulation" of all gold
coinage in terms of the (silver) dollar must faithfully reflect the
prevailing exchange-rate between the metals in the free market--and,
therefore, the explicit constitutional "silver standard" is really just
the reciprocal of an implicit "gold standard", and vice-versa."
(Vieira, pg. 90-91.)

A doctrinaire, monometallic "silver standard" or "gold standard" can
emerge only if Congress misapplies its monetary powers. As Von Mises
points out, in the nineteenth century "the demonetization of silver and
the establishment of gold monometallism was the outcome of deliberate
government interference with monetary matters. . . [I]t was not the
intention of the governments to establish the gold standard. What the
governments aimed at was the double standard. They wanted to substitute
a rigid, government-decreed exchange ratio between the independently
coexistent gold and silver coins. The monetary doctrines underlying
these endeavors misconstrued the market phenomena in that complete way
in which only bureaucrats can misconstrue them. The attempts to create
a double standard of both metals . . . failed lamentably. It was this
failure which generated the gold standard. The emergence of the gold
standard was the manifestation of a crushing defeat of the governments
and their cherished doctrines". (Ludwig Von Mises, Human Action, ante
note 2, at 471. also quoted by Vieira in note 374 pg. 91)

Alexander Hamilton expressed that "a preference ought to be given to
neither [gold or silver]" but realized that there were practical
problems arising "from the fluctuations in the relative [market] value
of the metals." But Hamilton felt this problem could be overcome if
"care" was "taken to regulate the proportion between them with an eye
to their average commercial value" and that the ratio between gold and
silver should "approach as nearly as can be ascertained, the . . .
average proportion. . . in . . . the commercial world" and that "there
can hardly be a better rule in any country for the legal than the
market proportion" and that each "metal would "find its true level,
according to their intrinsic utility" if produced by "the free and
steady course of commercial principles". (Alexander Hamilton, Report on
the Subject of a Mint, p. 2060-2061)

14. "Money is an universal medium, or common
standard, by comparison with which the value all merchandize may be
ascertained:. . . a sign, which represents the respective values of all
commodities. Metals are well calculated for this sign, because they are
durable and are capable of many subdivisions: and a precious metal is
still better calculated for this purpose, because it is the most
portable. A metal is also the most proper for a common measure, because
it can easily be reduced to the same standard in all nations: and every
particular nation fixes on it it's own impression, that the weight and
standard (wherein consists the intrinsic value) may both be known by
inspection only. . .

The coining of money is in all states the act of the sovereign
power; for the reason just mentioned, that it's value may be known on
inspection. And with respect to coinage in general, there are three
things to be considered therein; the materials, the impression, and the
denomination.

With regard to the materials, sir Edward Coke lays it down, that the
money of England must either be of gold or silver; and none other was
ever issued by the royal authority till 1762, when copper farthings and
half-pence were coined by king Charles the second. . . But this copper
coin is not upon the same footing with the other in many respects. . .

As to the impression, the stamping thereof is the unquestionable prerogative of the crown. . .

The denomination, or the value for which the coin is to pass
current, is likewise in the breast of the king. . . In order to fix the
value (note that Blackstone could easily have substituted for his
language "fix the value" the equivalent phrase "regulate the value" as
later appeared in Article I, Section 8, cl. 5 of the Constitution. For
the two verbs are synonymous. E.G. Black's Law Dictionary (4th red. ed.
1968), at 1451, defines "regulate" as "to fix, establish, or
control".), the weight and the fineness of the metal are to be taken
into consideration together. When a given weight of gold or silver is
of a given fineness, it is then of the true standard, and called
sterling metal. . . And of this sterling metal all the coin of the
kingdom must be made, by the statute 25 Edw. III c. 13. So that the
king's prerogative seemeth not to extend to the debasing or enhancing
the value of the coin, below or above the sterling value. . . The king
may also, by his proclamation, legitimate foreign coin, and make it
current here; declaring at what value it shall be taken in payments.
But this . . . ought to be by comparison with the standard of our own
coin; otherwise the consent of parliament will be necessary." (William
Blackstone, Commentaries, ante, note 10, at 276-278, as quoted by
Vieira, pg. 4)

16. "From 1603 through 1816, England followed a
bimetallic monetary policy, whereby the law made no change in the
character of the silver coinage, but altered the weight and
denomination of the gold coinage in order to secure the concurrent
circulation of both." (S. Breckenridge, Legal Tender: A Study in
English and American Monetary History, [1903], at 43-46)

20. Thomas Jefferson at first (before he saw the
wisdom of maintaining the standard of the piece of eight) advocated
making the original money unit or dollar (A silver coin) of the weight
of one ounce or one cubic inch, rainwater exactly, 'measures, weights
and coins, thus referred to standards unchangeable in their nature
would themselves be unchangeable. (Jefferson's Writings by H. A.
Washington, Vol VII p. 490 as quoted in Paul Bakewell, "Thirteen
Curious Errors about Money," p. 49)

It was upon Alexander Hamilton's suggestion that the United States
adopt as its standard the already existing standard--that of the
Spanish piece of eight. Hamilton had a study performed of the average
weight of the piece of eight (which was determined to be 371.25 grains
of pure silver) and in his report for the 1st Coinage Act stated:
"There is scarcely any authority in the economy of national affairs of
greater moment that the uniform preservation of the intrinsic value of
the money unit" (Annals of the First Congress, vol II, p. 211 as quoted
by Bakewell p. 490)

31.The United States Supreme Court in 1870 (as well
as all later decisions of the Court), grossly misunderstood the Coinage
Act of 1834.(33)
Characterizing it as Viera says, a debasement of the "gold standard, a
devaluation of the dollar, an expropriation of creditors, an impairment
of the obligation of contracts, or an excercise of some supposedly
unlimited legislative power to transmute the denominations of coins
without reference to their intrinsic values!"(34)
Vieira, further explains in refutation of this misunderstanding by the Supreme Court that:

First, on the face of the act, nothing "was taken from
the weight of each dollar". The act changed the intrinsic values (in
weight and fineness) of gold coins, to be sure--but, neither in 1834
nor at any previous time was there or had there been a "gold dollar",
from which any "weight" could be "taken". The act made no change
in--indeed, said nothing about--the silver dollar. Instead, the act sub
silentio retained the dollar, unchanged, as Congress had defined it in
1792, and once again used the dollar as the standard by which to
"regulate" the new gold coinage.

Second, on the face of the act, no "creditors were subjected to a
corresponding loss" through any "debasement" of the gold coinage.
Again, the act changed the intrinsic values (in weight and finess) of
gold coins in order properly to "regulate the Value" of those coins as
against the immutable silver standard. But this was nether a
"debasement" of the coinage nor an "expropriation" of creditors in any
constitutional sense of those terms.(35)

32.Report of 17 February 1834, in 10 id, Appendix,
at 245, 246. Daniel Webster made this comment on the Dollar as the
fixed unit of value or standard:

The Constitutional
standard of value is established and cannot be overthrown. (Webster's
Works, pp. 271-280 as quoted in Bakewell p. 49)